What is customer lifetime value?

We all stumble through life clutching onto the fuzzy memories of those pesky Pythagoras and algebraic theorems that haunted many a youth, and—with rare use cases in present day life—they normally end up getting filed and forgotten.

Enter customer lifetime value: the only equation you need to remember.

In ecommerce, CLV is the value a customer contributes to your business over their entire lifetime at your company.

The main methods of calculating CLV are split between historic and predictive CLV:

Historic CLV (Good indication of CLV)

Simply the sum of the gross profit from all historic purchases for an individual customer.

Predictive CLV (Great indication of CLV)

A predictive analysis of previous transaction history and various behavioural indicators which forecasts the lifetime value of an individual. As long as the equation is accurate, this value will become more accurate with every purchase and interaction.

Last November, research carried out by our in-house data scientist revealed that, whilst Black Friday shoppers tend to be less valuable (in the long-term) than those acquired throughout the rest of the year, the annual event continues to be an indispensable revenue-making opportunity for retailers.

The research also indicated that, when it comes to engaging and converting Black Friday shoppers, email is still the most powerful and effective channel to use.

With this in mind, and with only 15 days to go until this year’s festive sale frenzy, we’ve put together seven smart ways ecommerce marketers can optimise their Black Friday marketing campaigns this year;focusing specifically on:

Recommendation engines are difficult to get right (and not something you want to get wrong—unless you don’t mind ending up in Private Eye’s “Malgorithms” column).

But this doesn’t mean you should shun product recommendations altogether; on the contrary, in an industry dominated by personalisation, your brand should be investing more time and energy in making them accurate (and in no way annoying).

In this blog post, we’ve taken a look at seven different recommendation engines that can help you do just that. Whilst each one can be used in different ways for different emails (broadcast or automated), there are certain instances where specific engines lend themselves particularly well to specific campaigns; where this is the case, we’ve made a note using a ⭐ .

At just three years old, online womenswear brand Finery is leading the way when it comes to email marketing; often showing old-school, veteran brands how it’s done.

Just like its beautiful clothes, Finery’s emails are modern, stylish, inspiring and well-designed. They’re also highly relevant, thanks to the brand’s investment in different methods of personalisation—including customer lifecycle marketing (CLM).

To recap, CLM is an approach to marketing that takes its cue from where a customer is in their journey with your brand, ensuring the right message is sent to the right person at the right time.

In order to start using CLM, ecommerce marketers need to split their customer base into different lifecycle segments or ‘stages’. The nature of these segments will vary from business to business, but they tend to be split into:

Here at Ometria, we write a helluva lot about post-purchase campaigns. That’s because these campaigns are indispensable to any brand striving for a high customer retention rate.

But this post isn’t about post-purchase campaigns, per se. But rather, it focuses specifically on six good reasons for online retailers to get in touch with customers following their *first* ever purchase.

The goal of writing this is to help you go about keeping first-time customers engaged by sending the right content at the right time; in other words, by using a brilliant customer lifecycle marketing strategy.

FYI… Being a data-driven ecommerce marketing platform, it’s important for us to first stress that, in order for you to act on any of the below, you first need to have access to multichannel order data—otherwise you will struggle to recognise customers’ first orders.